Question: It is clear that any new costing system could potentially be met with considerable hostility and opposition from the department managers. Conduct research and make suggestions on how these behavioural issues could be minimised.

Bright's explanation of the proposal to managers prompted strong opposition from some of them. The managers of other departments for which the MCT division does work felt it would be unfair to increase their costs by increasing charges from the MCT division. One of them stated: The MCT division handles our department's overflow work when we're at capacity. I can't control costs in the MCT division, but if they increase their charges, I'll never be able to meet my department's cost budget. They're already charging us more than we can do the work for in our own department, if we had enough capacity, and you're proposing they charge us even more!

Also opposed was the production manager of the MCT division:

I've got enough to do getting good quality output to our customers on time, without getting involved in more paperwork! What's more, my department managers haven't got the time to become bookkeepers either. We're already charging all of the company's production costs to products and work for other divisions; why do we need this extra complication?

The company's sales manager also did not favour the proposal, telling Bright: We already have trouble being competitive with not only the big companies in our industry at home, but now also overseas where production is much cheaper. If we start playing games with our costing system, then we'll have to start changing our prices. We have to carry some low-profit - or even loss - items in order to sell the more profitable ones. As far as I am concerned, if a product line is showing an adequate profit, I'm not hung up about cost variations among the items within the line.

The strongest criticism of Bright's proposed new system came from Nature Candle's finance director: Departmentalising the costing rate may be a good idea, but I'm not sure you are attacking the main problem. How can we do anything with these cost estimates when you change the rates every month? When volume is rising, all our products make money, no matter what system you use. But when overall volume is falling, some products begin to show losses even though their own sales continue to hold up. I don't know whether they're really losing money or whether they just can't carry a full share of overhead costs. I don't see how your system is going to help me answer that question.

When Bright circulated these new calculations, the production manager of MCT division was even more perturbed than before: That's even worse! Now you're piling paperwork on paperwork! And on top of everything, we won't be able to charge out all of our costs. What am I supposed to do with the costs in molding and packing if I can't charge them to products or the work we do for other divisions?